THE PRESIDENT: Thank you very much. Thank you and good morning.
Let me begin by saying how very pleased I am for the support we are
receiving from all around the world for our stand against Saddam
Hussein's weapons of mass destruction program. Friends and allies share
our conviction that Saddam must not be allowed to develop nuclear,
chemical, and biological weapons or the missiles to deliver them.

Yesterday, the governments of Canada and Australia announced that
they are prepared to join the United States, Great Britain, and other
allies in a military operation should one prove necessary. As I have
said before, I hope we can avoid the use of force. The choice is up to
Saddam Hussein. Let the weapons inspectors back on the job with free
and unfettered access.

But if Saddam will not comply with the will of the international
community, we must be prepared to act. And I am very grateful that
others are prepared to stand with America.

Now, today, as has been said, I am transmitting to Congress the
annual Economic Report of the President. Let me begin by thanking the
Council of Economic Advisors for their hard work in preparing the
report. I also want to thank our wonderful economic team for all they
have done to promote prosperity for the American people. As the
Economic Report of the President makes clear, our economy is strong, our
prosperity is deep, our prospects are bright.

For five years our nation has pursued a new economic strategy for
the information age. We have reduced the deficit to slash interest
rates and spur private sector investment. We've opened markets to
create high-wage jobs. We've invested in the skills and education of
our people, so that every American has the chance to reap the benefits
of the new economy. All around us we see the results in revitalized
basic industries, thriving new industries, an investment boom, a vibrant
American economy.

In this report, the Council of Economic Advisors projects
continued growth through at least the next year. That would mark the
longest peacetime expansion in the history of the United States. As
this report makes plain, the expanding economy is producing wider
opportunity and rising incomes for American families. Since 1993 the
income of a typical family has increased $2,200 beyond inflation. We've
seen the fastest growth in real hourly wages in 20 years, after 12 years
in which real wages actually fell.

The standard of living is rising faster than the cost of living
now. And America has grown together, not apart, with the poorest fifth
of our families seeing the largest percentage jump in their income.
While incomes are rising, taxes are falling. A typical family earning
$50,000 a year now has the lowest tax burden in two decades; families
earning $25,000 a year, the lowest tax burden in three decades.

This economy is the envy of the world. But the progress was not
predestined. We must press forward with the strategy that is now
expending opportunities for American families, not abandon it. Above
all, we must maintain our fiscal discipline. It is the foundation of
our prosperity. My view is clear. Every penny of any projected budget
surplus should be reserved until we have taken all the steps necessary
to save Social Security for the 21st century.

I am heartened my the strong support this approach has gained from
the American people, including the young people to whom I spoke
yesterday at Georgetown University. And I am pleased by the strong
support members of Congress of both parties have given for saving Social
Security first.

In the past week, some have said that before we save Social
Security, we should repeal the iron laws of fiscal discipline. They
want to weaken the long standing pay-as-you-go rule for taxes, which
says that any spending proposal or any new tax cut must be paid for in
the budget. This rule has been a key to our drive to balance the
budget.

Let me be clear: fiscal irresponsibility gave us 12 years of
exploding deficits, division, declining wages. Fiscal responsibility
has given us the strongest economy in a generation. I will not allow a
return to the policies that have failed us in the past. Let us maintain
fiscal responsibility, save Social Security first, and prepare for an
even brighter future for our people. Thank you very much.